Carten-Fujikin Agrees to Pay More Than $750,000 to Resolve False-Claims-Act Allegations Relating to Paycheck Protection Program Loan

WILMINGTON, Del. - Carten-Fujikin, Inc. (CFI), a Delaware corporation with its principal place of business in Cheshire, Connecticut, has agreed to pay $774,812.51 to resolve allegations that it improperly obtained a Paycheck Protection Program (PPP) loan from the U.S. Small Business Administration (SBA) for which it was not eligible.

PPP was an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security Act, and administered by the SBA. The program was created to support small businesses and to help them continue to pay employees and meet other business expenses during the COVID-19 pandemic. A second round of loans was authorized in early 2021. To be eligible for these Second Draw PPP loans, a business was required to certify that it had no more than 300 employees, including those employed by any domestic and foreign affiliates. Applicants also had to certify that no entity owning, directly or indirectly, at least 20 percent of the business had significant operations in the People's Republic of China or Hong Kong.

CFI manufactures high-integrity valve products and integrated gas systems for the semiconductor industry. It is wholly owned by Fujikin of America Inc., which is in turn wholly owned by Fujikin Incorporated (Fujikin Japan), a Japanese company.

On or about January 28, 2021, CFI applied for and obtained a $500,000 Second Draw PPP loan. CFI subsequently applied for and received forgiveness of the loan. However, CFI, together with its affiliates, had more than 300 employees, and Fujikin Japan operated multiple locations in the People's Republic of China through its subsidiary Fujikin of China Incorporated.

U.S. Attorney Benjamin L. Wallace announced the settlement. Civil Chief Dylan J. Steinberg handled the case.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act (FCA). Under those provisions, a private party - known as a relator - can file an action on behalf of the United States and receive a portion of any recovery. In this case, the relator will receive a share of the settlement.

Individuals with information about allegations of fraud involving COVID-19 are encouraged to report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

This year the Administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to enhance the Administration's war on fraud, waste, and abuse in federal programs. When unscrupulous actors exploit these programs for their own financial gain, they defraud the government, harm the people these programs are designed to aid and protect, and undermine American businesses that play by the rules. Civil False Claims Act enforcement plays a critical role in combatting such fraudulent schemes, recovering billions of dollars for the American taxpayers, and holding wrongdoers accountable. False Claims Act matters will continue to be on the forefront of the battle against fraud, and the False Claims Act work of U.S. Attorney's Offices supports and advances the mission of the Task Force to Eliminate Fraud and the National Fraud Enforcement Division.

A copy of this press release is located on the website of the U.S. Attorney's Office for the District of Delaware. The settlement agreement is attached to this press release. Related court documents and information are located on the website of the U.S. Attorney's Office for the District of Delaware. Related court documents and information are located on the website of the District CourtLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. for the District of Delaware or on PACERLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. by searching for Case No.25-1206-CFC.

The claims resolved by this settlement are merely allegations. There has been no determination of liability.